Tanzania's local authorities eye more levy collection

Banks are now upfront on supporting local governments’ development process, a key area for fast-tracking social welfare, economic growth and levy collections.

After acquiring financial muscles, the banks are now ready to enter into a new area for pushing forward development and growth agenda on all fronts.


Those on the frontline are the CRDB Bank and TIB Development Bank, which are exemplary on supporting local authorities’ development programmes by extending loans to the institutions.

What is important is the fact that the two banks are working hand in hand to develop feasibility studies for such projects.

The CRDB Bank has gone an extra mile by organising seminars to educate and raise awareness of how LGAs could access the loans, with competitive interest tags. The CRDB Bank has already conducted three seminars in central, lake and southern zones.

The seminars raise concerns for LGAs to formulate strong lendable proposals to accelerate development in their areas.

In most cases, the CRDB Bank believes that, LGAs have an arm length of development projects but lack implementation funds for execution. Speaking during one of the seminars, CRDB Bank Managing Director, Dr Charles Kimei, said the bank promises to deliver quality banking services next to none to LGAs.

“The bank is ready to accommodate municipalities and councils when it comes to extending loans for development. “ÉSome have taken loans from us for various development reasons,” Mr Kimei said.

The bank gave an example of some municipalities which have taken development loans which brought a big difference to the society.

Among them, Mbeya City which secured a 17.5bn/- loan for constructing the Mwanjelwa Market and Mwanza Municipality which got a 2bn/- loan for construction of secondary school laboratories.
Others are Njombe 1.2bn/- and Dodoma 15.7bn/- for plot survey and infrastructure construction.

Dr Kimei said the bank is ready to extend more loans to municipalities, which are good payers, for the development activities such as constructing markets, schools, plots surveying, modern bus stands and the like.

The mindset that municipalities and councils are not paying back their loans has been proven to be a stereotype as, according to these two banks, local governments are good payees.

TIB Development Bank, also, came up with another project which will be implemented jointly with Kinondoni Municipal Council- Coco Beach recreation facilities.

The bank has already committed 260m/- used for developing a beach master plan that stretches from Magogoni’s lighthouse to Seacliff Hotel parking lot. The centre of project is at Coco Beach-Oysterbay beach front.

TIB will finance development of the necessary infrastructure through its Corporate Social Responsibility (CSR) programmes.

Other funds for beach beatification will come from other partners including the National Housing Corporation (NHC) and the UN Capital Development Fund (UNCDF).

Having built necessary beach infrastructure, the partners will go to the interested investors who will have to inject cash in line with their capacity and requirements under the Public Private Partnership approach.

The TIB Development Bank Managing Director, Mr Peter Noni, said the execution of the project is part of the bank’s CSR in trans forming public open spaces via local governments.

“The project execution complements projects works that the government-owned and the first development bank is undertaking in collaboration with the local governments in town planning projects, markets, bus terminals and other infrastructures,” he said.

So far, the project has consumed 260m/- from its concept design phase to completion of a Master Plan. Of the money, TIB Development sourced 86m/-while the NHC issued another 86m/-.

The Kinondoni Municipal Council contributed 30m/- while the United Nations Capital Development Fund contributed 10,000 US dollars (21.5m/-). On his part, the Kinondoni Municipal Director, Mr Musa Natty, said after completion, the project is expected to generate around 17bn/- which is half of the council’s annual revenues.

He said the area to be developed would remain a free open space to the general public and provide employment opportunities, boost domestic tourism and improve security in the area.

Going forward, TIB and the other partners in the project will now be required to source a total 6.0bn/- through various means including from other interested parties -- to build the required infrastructure for the project to kick off.

“Our goal is to try and make sure that the project is realized in a maximum of five years,” said Mr Natty. The beauty of these projects widen revenue collection of municipalities; hence have more power to implement other nonrevenue projects such as drainage system, schools and hospitals.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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